Third-party payers are agents who act on behalf of first parties (patients) and guarantee to cover any of their qualified health related payments partially or in full to providers (health care organizations, also called second parties) for care, products, and services rendered. They serve as intermediaries between health care consumers and physicians.
Those independent third-parties work accordingly to their special contracts (policies) in which an individual receives financial protection against potential risk of illness or existing health related problems from a government program or private insurance company. They hedge clients by pooling their risks to make payments more affordable for the insured health care consumers.
Those independent payers transfer health related risks from individuals in exchange for payments. Usually private health care insurances charge from individuals some certain amount of insurance coverage which is called the premium. In addition, insured patients share some percentage of the health care providers’ charges according to their contracts (50 : 50 or 80 : 20) with their clients, but not always. Some insurance companies pay in full for their clients, but then those patients usually have higher premiums. Government programs will make payments for medical care on behalf of the patients without any premiums or with co-payments in some cases.
Third-party payers may be federal, state and local government programs or private health insurance companies. Third-party government programs include such insurances as Medicare (age-based) and Medicaid (income-based). Independent health care insurances can be purchased separately by individuals or by their employers.
There are lots of different health care insurance companies nationwide, but top ones for 2012 are Unitedhealth Group, Wellpoint Inc. Group, Kaiser Foundation Group. Top 5 health insurances in the State of Illinois are Health Care Service Corp., Unitedhealthcare Ins. Co., Health Alliance Medical Plans, Humana Ins. Co., Aetna Life Ins. C.1
Third-party payers have a huge impact and influence on the nowadays health care world. They helped many individuals to cover their medical bills or compensate for them which otherwise they might not be able to afford. Insurance companies and government programs shield not only patients, but health care providers as well. Those payers reduce hospitals problems with uncollectible accounts receivable from patients who cannot pay.
On the other hand, they made somewhat uneconomical environment for health care organizations. The potential likelihood of the system abuse was created resulting in significant cost increase in medical services. Those independent payers monitor physicians and their procedures by trying to protect clients from overcharging creating a constant conflict of interest. Health care providers feel huge pressure and too much of control over their decision making process.
As we can see, the third-party payers influence our health care system from both positive and negative sides. Therefore, it's important to know how the various programs and healthcare organizations are interrelated, which rules they have, and what they cost us, both through premiums and through taxes in order to make further analysis and find ways to improve the situation in the health care world.